The government is creating a new operational taskforce of more than 1,000 specialist staff at the Australian Taxation Office (ATO) to prosecute companies, multinationals and high wealth individuals who are not paying enough tax. The initiative has been predicted to reduce tax bills for roughly 350,000 small Australian construction businesses.
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Mr Morrison said it was a sensitive time for the nation’s transitioning economy but this year’s budget represented an economic plan that included tax cuts for small and medium sized businesses.
The small business tax rate will be lowered to 27.5% and the turnover threshold to access it will be increased from $2 million to $10 million.
On economic growth, the government sees real GDP at 2.5 per cent in 2016/17, down from the previous estimate of 2.75 per cent, then strengthening to 3.0 per cent through to 2019/20.
This time a year ago, Mr Abbott was supporting then Treasurer Joe Hockey as he delivered the Abbott government’s second Budget.
But four hikes are planned for the excise tax on cigarette.
At a time when the growth is sluggish, unemployment too high and private sector investment catastrophic – and the budget bottom line is increasingly challenged to the point where a return to surplus is more of a wish that a targeted policy objective – some out-of-the-box policy is required.
Treasurer Scott Morrison revealed on Tuesday that the deficit for the current fiscal year that ends on June 30 is expected reach 39.9 billion Australian dollars ($30.7 billion).
On revenue boosting measures, the government said it is cracking down on tax avoidance by multinational companies, proposing a UK-style diverted profits tax (DPT).
A bunch of changes to superannuation rules – the best news is that low-income earners will benefit from a tax offset.
The budget fine print shows the potential cost of PFOS contamination is rising, with confirmation that Airservices Australia has identified a number of sites around Australia that are potentially contaminated with polyflourinated chemicals (PFCs) from firefighting foams, which it says were widely used at Australian airports from 1980 until 2010.
The package includes stronger protections for whistleblowers and harsher penalties for multinationals that fail to meet tax compliance or disclosure obligations.
Overall, not your typical pre-election cash splash budget, but it will be the outcome of the next election that gives the final score on what the electorate really think of this Budget.
Although sentiments in financial markets had improved, “uncertainty about the global economic outlook and policy settings among the major jurisdictions continues”, Stevens said.
The government is banking on a 20-year defence industry plan, as well as $50 billion in infrastructure and $2 billion for new dams and pipelines to keep jobs flowing.
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Mr Morrison said Australia was “leading the way” in global efforts to crackdown on multinational tax avoidance and commended his predecessor, Joe Hockey, for promoting worldwide cooperation on this challenge during Australia’s tenure as G20 chair in 2014.
